Six Chinese ships sailed into waters around a disputed archipelago on Friday, with Beijing saying they were there for "law enforcement" around islands Japan nationalised earlier this week.
The move - dubbed "unprecedented" by Tokyo - came as it was reported Japanese nationals had been physically attacked in China, marking the latest stage in a deteriorating row between Asia's two biggest economies.
Japanese living in or visiting China were warned to take extra precautions after assaults and harassment were reported to the consulate in Shanghai, a base for Japanese businesses and a popular tourist destination.
Tokyo summoned the Chinese ambassador to protest what it insisted was an incursion into territorial waters around islands it controls, called Senkaku, but claimed by Beijing, which refers to the islets as Diaoyu.
However, China was resolute, with the foreign ministry issuing a forthright statement claiming the boats were patrolling sovereign territory.
"Two Chinese surveillance ship fleets have arrived at waters around the Diaoyu Islands and adjacent islands on September 14, 2012, to start patrol and law enforcement," the statement said.
"These law enforcement and patrol activities are designed to demonstrate China's jurisdiction over the islands and safeguard its maritime interests."
Japan's coastguard said the ships had all left the area by around 1:20 pm (0420 GMT), approximately seven hours after the first vessel arrived.
Foreign Minister Koichiro Gemba cut short his visit to Australia as tensions mounted.
"I'd like to underscore that we should never let the situation escalate," he told reporters. "We have strong hopes the Chinese government will respond to the situation in an appropriate and also a calm manner."
Japan's Chief Cabinet Secretary Osamu Fujimura said the foreign ministry summoned China's ambassador, Cheng Yonghua, to lodge a protest.
"We understand that (the dispatch of) six ships is surely an unprecedented case," he told a press conference.
Fujimura said Yonghua had reiterated Beijing's claims to the islands in the East China Sea, which lie around 400 kilometres (250 miles) from the Okinawan capital of Naha and 200 kilometres from Taiwan.
Japan urged "that China do its utmost - above all else - to secure the safety of Japanese nationals in China", he said.
Fujimura's comments come as the Japanese consulate in Shanghai reported a series of physical attacks.
"A group was dining late at night, and they were harassed and assaulted by Chinese," said a statement on the consulate's website.
The consulate said bottles were thrown at some Japanese, and drinks and food were poured over others, while one person was reported having a pair of glasses broken.
In two of the incidents the assailants asked "Are you Japanese?" before acting, a Japanese diplomat in Shanghai told AFP on condition of anonymity.
Tokyo's foreign ministry warned its nationals to be aware of anti-Japanese demonstrations and to avoid drawing attention to themselves.
Relations between the two countries - often rocky because of a difficult history - have worsened since pro-Beijing activists were arrested and deported after a landing on one of the islands in August.
They were followed days later by Japanese nationalists, who raised their flag there.
Protests broke out in China and have continued since Japan on Tuesday announced it had nationalised three of the islands in the chain. It already owns another and leases the fifth.
The purchase was intended at least partially to calm the situation by heading off an attempt to buy them by Tokyo's provocative Governor Shintaro Ishihara, who charged Japan was not doing enough to protect its territory.
But Beijing's reaction has been sharper than many analysts expected. Some observers have pointed to the forthcoming leadership change in China's Communist Party and say the islands issue is being used as a way to distract public attention from the less-than-smooth transition.
The People's Daily, the party mouthpiece, on Friday called Tokyo's actions a violation of China's territorial sovereignty and an affront to its citizens.
"Is Japan prepared to pay the price for its vicious actions?" the commentary in the paper's domestic edition said. "They will be regarded as an invasion of China's inherent territory and thus China will resolutely strike back."